Central Bank of Ghana Implements Regulatory Reforms to Tighten Credit Risk Management

Strategic Insights -

The Governor of the Bank of Ghana, Dr Johnson Asiama, has announced a series of regulatory reforms aimed at strengthening governance across the banking sector and ensuring that credit obligations are honored. As part of these reforms, a new Credit Risk Management Directive, aligned with Basel principles, will set minimum standards for underwriting, monitoring, and provisioning. This directive is expected to promote financial stability within Ghana's banking sector.

Key Takeaways:

  • The Bank of Ghana is implementing a new Credit Risk Management Directive, aligned with Basel principles, to set minimum standards for underwriting, monitoring, and provisioning.
  • The directive aims to identify and take firm actions against deliberate defaulters to ensure that credit obligations are honored.
  • A Bancassurance Directive will be introduced to strengthen governance arrangements in bancassurance, where banks sell insurance products.
  • A Large Exposures Directive will be implemented to limit concentration risk.
  • New guidelines on credit concentration will be introduced to encourage greater diversification across loan portfolios.
  • The reforms are expected to promote financial stability within Ghana's banking sector.
  • The central bank is seeking to strengthen governance across the banking sector.
  • Banks will be required to identify and take decisive action against deliberate loan defaulters.

Statistics:

  • No specific statistics are mentioned in the article, but the reforms aim to promote financial stability within Ghana's banking sector.

Sources:

  • Ghana Web, August 13, 2025: "Bank of Ghana to introduce Credit Risk Management Directive to strengthen governance"